World stock markets rallied yesterday as oil prices climbed and companies reported solid earnings, while the yen again retreated against the dollar.
MSCI’s broad gauge of global stocks climbed 0.9 per cent, on pace for its best session in three weeks.
The US benchmark S&P 500 gained 0.9 per cent and the pan-European FTSEurofirst 300 index advanced 0.8 per cent.
The yen fell against the dollar for a second day as a key Japanese economic adviser reiterated that the country was prepared to intervene in currency markets.
But against a basket of currencies, the dollar was little changed, helping to steady oil and other commodities denominated in the greenback.
The Dow Jones industrial average was rising 172.68 points, or 0.98 per cent, at 17,878.59, the S&P 500 was gaining 18.28 points, or 0.89 per cent, at 2,076.97 and the Nasdaq Composite was adding 31.65 points, or 0.67 per cent, at 4,781.86.
“I’d probably say it’s the currency fluctuations that are influencing the market in the short term,” said Walter Todd, chief investment officer at Greenwood Capital Associates in Greenwood, South Carolina.
Allergan shares propped up the S&P 500 after the US pharmaceutical company posted strong earnings. Results from Credit Suisse and jewellery maker Pandora helped the European index.
“The market has been resilient and has offered the opportunity for the buyers of the pullback to capitalize on it and that’s why we’re seeing a move back into equities,” said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.
Greek shares hit their highest level in 2016 after eurozone finance ministers offered to grant Greece some debt relief, with the move causing Greek 10-year bond yields to fall below eight per cent for the first time since early December.
The yen slid 0.7 per cent against the dollar as risk appetite improved for a second straight session, undermining traditional safe havens such as the Japanese currency. Repeated verbal warnings from Japan over the weekend and yesterday saying it was prepared to step in to weaken the currency has also held off investors.
Oil prices rose as supply disruptions of 2.5 million barrels per day in Canada and elsewhere offset concerns about growing record high US crude stockpiles.
US crude gained two per cent to $44.30 a barrel, while benchmark Brent crude rose 3.2 per cent to $45.03 a barrel. Oil prices have recovered some ground after touching 12-year lows earlier in 2016.
US Treasuries were steady before the government was due to sell $24 billion in three-year notes.
Benchmark 10-year notes gained 1/32 in price yesterday to yield 1.7578 per cent, down from 1.76 per cent on Monday.